Tuesday, November 25, 2008

Interest Rates Coming Down?

Taylor's Rule estimates what the prime interest rate should be. Currently it estimates it should be 14.5% as apposed to 15.5%.

Here's to hoping that the reserve bank reduces prime at it's next meeting in December 2008. With inflation expected to decrease in 2009, coupled with political motivations, prime is expected to decrease in 2009.

Hopefully this will spur the economy in general, and construction in particular. For details of Taylor's Rule, published by Cees Bruggemans, Chief Economist at FNB, click here.